MARRIAGE OF MARESH

• Decision Date: 22 October 2003
• Citation: 78 P.3d 157,190 Or. App. 228
• Parties: In the Matter of the MARRIAGE OF Douglas MARESH, Appellant, and Kathy Adele Maresh, Respondent.
• Court: Oregon Court of Appeals

78 P.3d 157

190 Or. App. 228

In the Matter of the MARRIAGE OF Douglas MARESH, Appellant, and

Kathy Adele Maresh, Respondent.

00-3032; A119156.

Court of Appeals of Oregon.

Argued and Submitted July 24, 2003.

Decided October 22, 2003.

Barry Adamson argued the cause and filed the brief for appellant.

Mark Johnson, Portland, argued the cause for respondent. On the brief was Patricia D. Gaw, Winston.

Before LANDAU, Presiding Judge, and ARMSTRONG and BREWER, Judges.

BREWER, J.

After petitioner failed to pay respondent amounts owed under the property division provisions of the judgment dissolving the parties' marriage, respondent petitioned for a sheriff's sale of the parties' former marital residence.¹ Petitioner appeals from the order granting respondent's petition, arguing that the trial court erred in determining that he was not entitled to a homestead exemption as provided in ORS 23.240(1). Because the trial court's ruling was based on the interpretation of a statute, we review for errors of law. Holbrook v. Precision Helicopters, Inc., 162 Or.App. 538, 541, 986 P.2d 646, rev. den., 329 Or. 527, 994 P.2d 128 (1999). We affirm.

The judgment dissolving the parties' marriage was entered in January 2001. Paragraph 18 of the judgment awarded the marital residence and real property to petitioner "free of any interest of Respondent." However, it further provided that respondent was "awarded a judgment lien against the property awarded to Petitioner in the amount of $25,700 to be paid as set forth in paragraph 14 above." Paragraph 14 of the judgment provided:

"14. PROPERTY DIVISION JUDGMENT.

"(a) Respondent is awarded a judgment against Petitioner in the amount of $25,700 on account of property division.

"(b) This judgment shall be a lien on the real property awarded to Petitioner in Paragraph 17 herein.

"(c) This judgment shall be secured by a note and trust deed, which shall be executed by Petitioner.²

"(d) This judgment shall not bear interest if paid on time. If this judgment is not paid on time, then this judgment shall bear simple interest at the rate of 9% per year until paid in full.

"(e) This judgment shall be due and payable as follows:

"(1) $5,000 to be due and payable on February 23, 2001.

"(2) $20,700 to be due and payable February 23, 2002."

Thereafter, petitioner paid a total of $1,652.50 on the judgment. On April 3, 2002, respondent filed a petition for sale of the real property to satisfy the remaining balance owed on the judgment.³ In the petition, respondent conceded that the real property included a manufactured home that constituted petitioner's residence. Petitioner objected to the sale of the property on the ground that it was exempt under ORS 23.240 from execution. The trial court determined that the property was not exempt and ordered its sale. Petitioner appeals from that order. See ORS 19.205(2)(c).

At the heart of the parties' dispute is ORS 23.240(1), which provides, in part:

"A homestead shall be exempt from sale on execution, from the lien of every judgment and from liability in any form for the debts of the owner to the amount in value of $25,000, except as otherwise provided by law * * *. The homestead must be the actual abode of and occupied by the owner, or the owner's spouse, parent or child * * *."

(Emphasis added.) The dispositive issue is whether the emphasized exception to the homestead exemption precludes its application in this case.

According to petitioner, any levy of execution on the judgment awarded to respondent is subject to the $25,000 exemption prescribed by the statute. Petitioner relies on three statutes to support his argument that the exception to the exemption does not apply here. First, he asserts that ORS 23.242(2), which provides that the homestead exemption does not apply to certain child support judgments but fails to refer to property division judgments, furnishes evidence of the legislature's intention to subject the latter type of judgment to the exemption. He also relies on ORS 23.250 and ORS 23.260, which, respectively, limit the quantity of land that may be subjected to the exemption and except from their application construction liens, purchase money liens, and mortgages. Again, because those statutes fail to mention property division judgments expressly, petitioner asserts that such judgments are subject to the exemption. Among other arguments, respondent counters that such a construction of ORS 23.240(1) would defeat the purpose of the dissolution judgment, which was to balance the division of the parties' property.

The parties' dispute presents a problem of statutory construction that we resolve under the methodology of PGE v. Bureau of Labor and Industries, 317 Or. 606, 610-12, 859 P.2d 1143 (1993). We examine first the text of the statute in context to determine whether the legislature's intended meaning has been expressed unambiguously. If the statute is ambiguous, we resort to legislative history and, when necessary, other aids to construction. Id. at 611-12, 859 P.2d 1143.

In his discussion of various statutes that conceivably could "otherwise provide" that the homestead exemption is inapplicable to the present case, petitioner refers only in passing to ORS chapter 107, the statutory source of the trial court's authority in crafting the dissolution judgment. Petitioner asserts that "no aspect of ORS [c]hapter 107 empowers the courts to thwart * * * the statutory right implemented via ORS 23.240." We disagree.

ORS 107.105(1)(f) states, in part, that a dissolution judgment may provide:

"For the division or other disposition between the parties of the real or personal property, or both, of either or both of the parties as may be just and proper in all the circumstances. * * * Subsequent to the filing of a petition for annulment or dissolution of marriage or separation, the rights of the parties in the marital assets shall be considered a species of coownership, and a transfer of marital assets under a decree of annulment or dissolution of marriage or of separation entered on or after October 4, 1977, shall be considered a partitioning of jointly owned property."

Both of the quoted sentences in that statute inform our decision here.

The first sentence authorized the trial court to award the parties' real property to one of them while creating an adjusting money lien against the property in favor of the other. Fulfillment of the court's duty to make a division of property that is "just and proper in all the circumstances" depends on its authority to make financial adjustments without the unbalancing effect that would result from later application of the homestead exemption. That authority is most critical where, as here, the parties owned only one parcel of real property, thus creating a circumstance in which it was likely that one spouse ultimately would receive that parcel free of any ownership interest of the other. If the spouse whose interest was converted to a balancing money judgment were to lose a substantial portion of the lien created by that judgment based on the operation of ORS 23.240, the ultimate division of property would not be just and proper in all the circumstances. Accordingly, the dissolution trial court's authority to make a just and property division of property excepted respondent's judgment lien from the application of ORS 23.240(1).⁴

The second quoted sentence of ORS 107.105(1)(f) reinforces our conclusion. It provides that the division of the parties' real property constituted a "partitioning of jointly owned property." That provision implements "`[t]he purpose to be accomplished by equitable division[:] a complete severance of common title, so the portion awarded each [spouse] is free from claims or domination of the other.'" Engle and Engle, 293 Or. 207, 217, 646 P.2d 20 (1982) (quoting Collins v. Oklahoma Tax Commission, 446 P.2d 290 (Okla 1968)); see also ORS 107.105(6) (providing for supplemental proceedings after dissolution judgment for partition of undivided interests in property and prescribing procedure provided in ORS 105.405, the general partition statute).

In partition proceedings, a primary consideration for the court in determining whether to permit an owner to acquire the interest of another owner is preventing the diminution in value of the transferor's interest in the property. Maupin v. Opie, 156 Or.App. 52, 65-66, 964 P.2d 1117, rev. den., 328 Or. 194, 977 P.2d 1172 (1998). Here, the dissolution trial court addressed that concern by securing the value of respondent's interest in the property with a judgment lien. That lien attached to the interest that was...